Going Deeper: NEEP’s Take on Proposed Carbon Regs and the Role of EE

For the last year and a half, seemingly every conversation about energy policy has been dominated by the U.S. Environmental Protection Agency’s (EPA) plans to regulate the emissions of carbon dioxide from power plants.

Interchangeably referred to as the Clean Power Plan, 111d (in reference to the relevant section of the federal Clean Air Act) or carbon pollution standards, the issue hit center stage in June of 2013, when, based on the authority provided in Section 111(d) of the Clean Air Act, President Obama directed the EPA to “issue carbon pollution standards, regulations, or guidelines, as appropriate, for modified, reconstructed and existing power plants.”

The President further directed the EPA to issue those proposed standards or guidelines by June 1, 2014, with the final standards or guidelines issued by June of 2015. States would then be required to submit plans by June 2016 outlining how they plan to implement the carbon emissions standards.  

On June 2, 2014, the EPA issued its proposed Clean Power Plan (CPP) to cut carbon pollution from power plants – the largest source of carbon pollution in the U.S. – by 30 percent from 2005 levels. The proposed draft rule includes state-specific goals for CO2 reductions with guidelines for the development, submission and implementation of state plans.

In applying a “best system of emission reduction” standard, the EPA established four “building blocks” through which states can develop and implement their compliance plans. These include:

1.    Heat rate improvements of energy generating units;

2.    Reducing emissions at the most carbon-intensive units by substituting less carbon-intensive resources;

3.    Expanding low- or zero-carbon generation; and,

4.    Using demand-side energy efficiency to reduce the amount of electricity generation required.

NEEP’s Support of the Clean Power Plan and State Implementation Efforts

As the Northeast and Mid-Atlantic region has some of the most mature, cost-effective and successful energy efficiency policies seen anywhere in the U.S., NEEP has zeroed in on building block 4 as the key to state compliance with the proposed Clean Power Plan.

Over the last year, we have worked with a variety of stakeholders – our fellow Regional Energy Efficiency Organizations, or REEOs, from around the country; state air and energy offices and regulators; efficiency program administrators; and other energy efficiency advocates.

Together we worked to foster greater understanding of the role of energy efficiency in meeting the CPP requirements, and to prepare comments to the EPA supportive of the comprehensive inclusion of energy efficiency as a key strategy to reduce power plant carbon pollution. This effort addressed a variety of topics, including the complex issues of evaluation, measurement and verification (EM&V) of energy efficiency programs.     

We especially needed to look at how the states participating in the Regional Greenhouse Gas Initiative (RGGI) planned to meet their CPP requirements. EPA explicitly pointed to RGGI in its proposal, highlighting RGGI’s successes in both funding and implementing progressive energy efficiency measures across the nine-state region, as a model for regional implementation.

We also were able to highlight how the Northeast states were leading the country in annual energy savings from efficiency policies and programs, which bolsters the case that the energy savings targets proposed by the EPA – designed to “ramp up” to 1.5 percent annual retail electricity savings – may, in fact, be too conservative.

As we noted in our formal written comments to the EPA: “No fewer than eight states in the Northeast region of the U.S. in 2013 achieved greater than 1 percent in electricity savings as a percentage of state retail electric sales as a result of their energy efficiency programs. Indeed, the leading states of Massachusetts, Rhode Island and Vermont… are approaching or have exceeded 2 percent savings levels.” 

We further went on to advocate for the use of building energy codes as part of state compliance plans, pointing to the efforts of the Regional EM&V Forum to help create a process for calculating savings from code efforts attributed to energy efficiency program administrators; for the inclusion of state-based appliance efficiency standards; and for states that use a “mass-based” system of overall emissions reductions (such as that employed by the RGGI states) to be able to convert those calculations to the system of “rate of emissions reductions” suggested by the EPA.

In addition, NEEP was instrumental in developing, and leading a coalition effort which resulted in joint comments also being submitted to the EPA that focused specifically on a series of very complex but extremely important EM&V related issues.

Along with NEEP, the 13 others in this coalition included the American Council for an Energy Efficient Economy (ACEEE), Natural Resources Defense Council (NRDC); Southeast Energy Efficiency Alliance (SEEA); Alliance to Save Energy; South-Central Partnership for Energy Efficiency as a Resource (SWEEP); the Northwest Regional Technical Forum; and the Southern Alliance for Clean Energy.

NEEP will continue to monitor the development of the Clean Power Plan, and advocate for as strong a role as possible for energy efficiency, in support of EPA’s vision for a more sustainable, reliable and affordable energy future for all Americans. 

To read NEEP’s comments to the EPA; the joint stakeholder comments on EM&V-related issues; or comments filed by the collective RGGI states, visit our dedicated Clean Power Plan page.

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